A Brief History of Variance Standards for the Municipal Law Practitioner

By: Attorneys Christopher L. Boldt and Sharon Cuddy Somers

“It is probably safe to say that no single statutory provision has been the source of more litigation . . . or more misunderstanding.”1

Introduction

As Judge Horton noted in Grey Rocks Land Trust v. Town of Hebron, “anyone who attempts to organize and set forth a clear picture of the American law on variances either (a) has not read the case law, or (b) has simply not understood it.”2Bearing in mind that wise statement, this article attempts to summarize the New Hampshire Supreme Court decisions that discuss the standard for variances. We hope to show that New Hampshire variance jurisprudence continually evolves, and we leave it to the reader to determine whether this article has successfully avoided, or sadly confirmed, Judge Horton’s unfavorable prognosis.

Variance criteria are identified by statute with the “diminution in value” element referenced in case law. Each applicant must satisfy all of the five requirements to be granted a variance:

1.that a denial of the variance would result in unnecessary hardship to the applicant;

2.that no diminution in value of surrounding properties would occur;

3.that the proposed use would not be contrary to the spirit of the ordinance;

4.that granting the variance would not be contrary to the public interest; and

5.that granting the variance would do substantial justice.3

While each of the five criteria must be met, much of the case law contains analysis of the first criterion—unnecessary hardship. As the cases keep appearing before the Court, however, the remaining four elements are gaining momentum and importance.

The article begins with a discussion of the Court’s hard-line approach to the hardship variance criterion in Grey Rocks. The next section moves on to the Court’s first application of the more lenient approach to the hardship requirement as adopted in Simplex Technologies v. Town of Newington.4The third section then describes the Court’s distinction of area variances from use variances, and the new analysis created for area variances in Boccia v. City of Portsmouth.5The next section outlines the Court’s refinement of the hardship criterion in cases following the Simplexand Boccia analyses. Finally, the last section contains the Court’s most recent clarifications regarding the other four variance elements in the statute: (1) diminution of property values of surrounding properties; (2) spirit and intent of the ordinance; (3) the public interest; and (4) substantial justice.6

The Court’s decisions have marked an unsettled and shifting course for boards, courts, and land-use practitioners to follow when addressing variance issues. The Supreme Court is divided on variance standards and has created, for the first time, a distinction between “use” and “area” variances, distinguishing the requisite elements of “unnecessary hardship” under each type. The justices’ debate and discussion through the cases is certainly instructive and intellectually challenging. The current variance standards, however, will likely be further refined and clarified as the Court receives the next wave of variance appeals. Therefore, caution should be used when advising potential applicants and boards. The particular facts of each application and the depth of the presentation to a zoning board of adjustment have never been more important.

I. The World According to Grey Rocks—the Pre-Simplex Standard

If in the beginning was the Word, in the case of a variance request, the word was an emphatic “NO”. Variances were not favored under statute or case law for any reason. A variance applicant faced a daunting, uphill battle for the grant of a variance. The first hurdle for meeting the variance criteria—unnecessary hardship—was incredibly high. It required that “the deprivation resulting from application of the ordinance must be so great as to effectively prevent the owner from making any reasonable use of the land.”7Moreover, the hardship itself must result from “some unique condition of the parcel of land distinguishing it from others in the area…. [so that it is the] uniqueness of the land, not the plight of the owner, [which] determines whether a hardship exists.”8The high standard set for proving unnecessary hardship is outlined in Grey Rocks.

The variance analysis used in Grey Rocks required the landowner to prove two things: (1) that no reasonable use could be made of the land without the variance; and (2) that this was due to unique conditions of the land that distinguish it from the surrounding area.9In this case, the Supreme Court found the variance applicant, Newfound Lake Marina, had not met its burden of proof regarding these two criteria and reversed the variance awarded by the Hebron ZBA and upheld by the Grafton County Superior Court.10The marina had requested a variance to build a fifth boat-storage building on its 35-acre tract that would be 450 feet closer to the abutter, Grey Rocks, than the existing buildings. The marina was a pre-existing non-conforming use in the Town’s “Lake District,” which was subject to an ordinance with purposes limited to “protect [scenic, recreational and environmental] values and encourage only such further developments as will not harm the environment or destroy this district or any part thereof as a natural and scenic resource of the Town.”11In its appeal, Grey Rocks argued that the ZBA had made no factual findings on the record relating to hardship and no supporting facts appeared in the record, making the trial court’s affirmance of the variance neither reasonable nor legally correct.12The Supreme Court agreed and found that the marina failed to meet the two aspects of the hardship analysis. The Court held that the “uncontroverted fact that the marina had been operating as a viable commercial entity for several years prior to the variance application is conclusive evidence that a hardship does not exist.”13The Court also found that the ZBA had failed to find that the applicant’s land was unique.14

The marina asserted it had the right to develop its existing non-conforming use in a way that would result in a mere intensification of the use via natural expansion and growth of trade. The Court, however, rejected this argument because the proposed expansion would be too substantial.15In so doing, the Supreme Court noted in dicta that it had “never permitted an expansion of a non-conforming use that involved more than the internal expansion of a business within a pre-existing structure.”16In conclusion on this point, the Court held “as a matter of law that the construction of a new building…would substantially impair the natural scenic, recreational and environmental values of the surrounding property, contrary to the purposes of the Lake District, and is therefore beyond the scope of the ‘natural expansion’…to which the marina is entitled.”17

The lone dissenter in Grey Rocks, Justice Horton, was the first to substantially suggest that the hardship analysis used by the Court was on a collision course with the constitutional protection of property rights. The New Hampshire Constitution sets forth that a person “be protected in the use and enjoyment of one’s property.”18Justice Horton compared the hardship standard as a “substantial taking.”19After rejecting the “no reasonable use” standard because it had “stopped off the safety valve” that variances were intended to provide, Justice Horton suggested that either an “arbitrary and capricious” standard or a “reasonable use” approach would be more favorable, fair, and in compliance with the constitutional and statutory mandates.20Under an “arbitrary and capricious” standard, a board or court would start with the basic acknowledgment of the right to use the property and then determine that an “unnecessary hardship” existed based on an analysis of “‘whether the zoning limitation, viewing the property in the setting of its environment, is so unreasonable as to constitute an arbitrary and capricious interference with the basic right of private property.’”21Under the “reasonable use” approach, a board and/or court would consider whether “‘the proposed use is reasonable and the restriction legitimate but more burdensome than was intended, then the restriction may be modified so long as there is no impairment of the public purpose of the regulation.’”22

While stating that he would have affirmed the trial court’s grant of a variance, Justice Horton reminded the Court that the “ladder of review mandates that we not substitute our judgment for that of the zoning board, but give appropriate deference to each stopping point on the ladder.”23He also rejected the theory that no variance would be available where an existing use is in place:“[t]his may be appropriate when the subject property is small, or ‘used up,’ but it is not appropriate when there is a reasonably useful portion of that property.”24

II. Simply Simplex—the “New” Standard

Justice Horton’s dissent in Grey Rocks was a “voice crying in the wilderness” for approximately nine years until the Court rendered its decision in Simplex Technologies v. Town of Newington.25Underlying this reversal of fortunes was the variance application of Simplex Technologies to re-develop 6.2 acres of its former manufacturing facility abutting Woodbury Avenue into a commercial/retail shopping center. The Court’s shift towards a gentler approach to the element of unnecessary hardship began with this case.

Simplex’s property was located in the town’s industrial district, and Woodbury Avenue was the boundary line between the industrial and commercial zones. Two retail malls already existed on Woodbury Avenue across from the Simplex site on land that had formerly been in the industrial zone. When the ZBA denied the variance, Simplex argued to the Rockingham County Superior Court (Galway, J.) that the denial of the variance was unreasonable, that the enforcement of the ordinance in this case was discriminatory, and that the ordinance on its face was unconstitutional. The trial court held that the ZBA’s decision was not unreasonable because Simplex failed to meet the five criteria of RSA 674:33, I (b).26The trial court also rejected Simplex’s other arguments for reasons not stated in the subsequent decision on appeal.

Inreversing the trial court, the Supreme Court started with the standard notation that a ZBA may authorize a variance if the five conditions are met, noting that the hardship requirement is the most difficult to meet.27Although this beginning was no different than the Court’s analysis in Grey Rocks, the Court then began to lay the groundwork to modify the prior standard. The Court started by noting Judge Horton’s dissent in Grey Rocks and its concerns over a “substantial taking.”28The Court found that its “current restrictive approach” was “inconsistent with [its] earlier articulations of unnecessary hardship”29and “inconsistent with the notion that zoning ordinances must be consistent with the character of the neighborhoods they regulate.”30Also, recognizing the “constitutional rights of landowners,” the Court declared that zoning ordinances “‘must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the regulation.’”31

Noting these considerations, the Court summarized its rationale for the impending change of standard:

Inevitably and necessarily there is a tension between zoning ordinances and property rights, as courts balance the right of citizens to the enjoyment of private property with the right of municipalities to restrict property use. In this balancing process, constitutional property rights must be respected and protected from unreasonable zoning restrictions. The New Hampshire Constitution guarantees to all persons the right to acquire, possess, and protect property. See N.H. Const. pt. I, arts 2, 12. These guarantees limit all grants of power to the State that deprive individuals of the reasonable use of their land.32

Then, the Court announced the new standard for the hardship element of the variance requirements. The Court stated a variance applicant can fulfill his or her burden of proof on the element of unnecessary hardship by showing that:

(a) a zoning restriction as applied to their property interferes with their reasonable use of the property, considering the unique setting of the property in its environment; (b) no fair and substantial relationship exists between the general purposes of the zoning ordinance and the specific restriction on a property; and (c) the variance would not injure the public or private rights of others.33

The Court then remanded the case to the trial court to use this new standard.34

The first decision to apply the new Simplex hardship standard on appeal was Rancourt v. City of Manchester.35In Rancourt, the appeal was brought by abutters who were challenging the ZBA’s and the Hillsborough County North Superior Court’s (Barry, J.) decisions to grant a variance. The applicants’ variance request was to stable horses on their three-acre residential lot. In starting its analysis, the Supreme Court noted that variance applicants no longer must show that the zoning ordinance deprives them of any reasonable use of the land:“Rather, they must show that the use for which they seek a variance is ‘reasonable,’ considering the property’s unique setting in its environment.”36

In applying the three criteria for unnecessary hardship set forth in Simplex, the Court in Rancourt found that both the trial court and ZBA could rationally have found that the zoning ordinance precluding horses in the zone interfered with the applicants’ reasonable proposed use of the property considering the various facts involved: (1) the lot had a unique, country setting; (2) this lot was larger than surrounding lots; (3) the lot was uniquely configured with more space at the rear; (4) there was a thick wooded buffer around the proposed paddock area; (5) and the proposed one and a half acres of stabling area was more than required per zoning laws to keep two livestock animals in other zones.37The Court found these facts supported the trial court’s and ZBA’s decisions that “these special conditions of the property made the proposed stabling of two horses on the property ‘reasonable.’”38

With Simplex establishing a new standard and Rancourt applying it, the New Hampshire Supreme Court had begun to change the law of variance in monumental ways. What this meant for municipalities, applicants, and ZBAs was only starting to unfold.

III. But Wait! There’s More—Boccia: Before and Beyond

Just one year after Rancourt, when ZBAs, trial courts, and land use practitioners were becoming comfortable using the Simplex standard, the New Hampshire Supreme Court issued the highly fractured opinion of Bacon v. Town of Enfield.39Chief Justice Broderick wrote alone for the “majority” decision. Justices Dalianis and Duggan concurred with the ruling, but did so on other grounds. Lastly, Justices Nadeau and Brock dissented. With so many different viewpoints, the Bacon decision was a signpost for things to come.

The issue in this case was Ms. Bacon’s belated request for a variance. Ms. Bacon had installed at her residence, on the shore of Crystal Lake, a 4 x 5½ foot shed for a new propane boiler to heat her home; unfortunately, she did so without getting the necessary variance. The shed, like most of Ms. Bacon’s house, was located within the required 50-foot setback from the lake. The ZBA denied the variance because it “(1) did not meet the ‘current criterion of hardship’; (2) violated the spirit of the zoning ordinance; and (3) was not in the public interest.”40At trial, Ms. Bacon’s contractor testified that the current location was the most practical, safest, and most cost-efficient location but conceded that other locations within the house or further away from the water would work and comply with the setback. In upholding the ZBA’s action as reasonable and lawful, the Grafton County Superior Court (Morrill, J.) concluded that Ms. Bacon had not demonstrated unnecessary hardship under the Simplex standard, and that the zoning restriction did not interfere with her reasonable use of the property.41

Chief Justice Broderick’s “majority” opinion did not address the new standard for the hardship element of the variance analysis. He began with the standard notation of the five-part test for granting a variance, but then focused on the ZBA’s and trial court’s findings that the variance violated the spirit of the ordinance.42Ms. Bacon had not disputed the trial court’s characterization of the general or specific purposes of the ordinance regarding prevention of overcrowding of land, protection of shore lands, and their effects on state waters. Noting that the single addition of this shed might not greatly affect the shorefront congestion or the overall value of the lake as a natural resource, Chief Justice Broderick discussed that the cumulative impact of many such projects could be significant, and “[f]or this reason, uses that contribute to shore[-]front congestion and over-development could be inconsistent with the spirit of the ordinance.”43Also, mentioning that reasonable minds could differ, Chief Justice Broderick cited to Britton v. Town of Chester for the proposition that it is not within the power of the Supreme Court to act as a “super zoning board,” and affirmed the ZBA and trial court 44

While agreeing with Chief Justice Broderick’s conclusion, Justices Duggan and Dalianis based their concurrence on the finding that Ms. Bacon failed to demonstrate unnecessary hardship under the Simplex standard. They noted that Simplex did not purport to establish a rule of reasonableness for granting variances: “[M]erely demonstrating that a proposed use is a ‘reasonable use’ is insufficient to override a zoning ordinance….Variances are, and remain, the exception to otherwise valid land use regulation.”45The concurrence suggested that two factors not included in Simplex should be considered:(1) “the distinction between a use variance and an area variance”; and (2) “the economic impact of the zoning ordinance on the property owner.”46These additional factors would become the basis for the future standard for area variances.

Under the first factor, the concurrence defined a use variance as one that would allow “the landowner to engage in a use of land prohibited by the [zoning] ordinance.”47It then defined an area variance as one that would involve “a use permitted by the zoning ordinance but grant[] the landowner an exception from strict compliance with physical standards such as setbacks.”48Accordingly, the concurrence noted that use variances pose a greater threat to the “integrity of a zoning scheme,” while area variances would allow the “relaxation of one or more incidental limitations to a permitted use [which] does not alter the character of the district as much as a use not permitted by the ordinance.”49While noting that dicta in Ouimette v. Somersworth50indicated the Court would not distinguish between types of variances because of the language of RSA 674:33, I (b), the concurrence asserted that the statutory language does allow the adoption of this distinction between types of variances.51

Under the second factor, the concurrence noted that “[t]he U.S. Supreme Court has recognized economic impact considerations are critical in deciding whether land use controls amount to a taking for constitutional purposes.”52In evaluating the economic impact factor with respect to area variances, the concurrence suggested that zoning boards and courts “will not grant a variance merely to avoid a negative financial impact on the landowner [nor] need the landowner show that without the variance the land will be rendered valueless.”53Rather, courts and zoning boards must “balance a financial burden of the landowner, considering the relative expense of available alternatives, against the other factors enumerated here and in Simplex.”54

Lastly, the concurrence suggested that boards and courts must consider whether the hardship arises from the unique setting of the property and its environment via a hardship imposed solely on the subject property itself. The concurrence noted that “where a zoning restriction imposes a burden on a number of similarly situated landowners, the proper remedy is an amendment of the ordinance.”55Describing the balance between the availability of alternatives and hardship to the landowner, the concurrence found demonstrating that a proposed use is a reasonable use would be insufficient to override the zoning ordinance, but “the mere fact that alternatives exist to accomplish the same goal without a variance does not necessarily mean that no hardship exists.”56In this case, however, the concurrence found that Ms. Bacon failed to demonstrate unnecessary hardship, especially in light of the evidence of alternate locations, which complied with the ordinance without prohibitive costs.57

The dissent of Justices Nadeau and Brock summarily dismissed Chief Justice Broderick’s conclusion that the use violated the spirit of the ordinance.58It stated the aggregate principle promoted by Chief Justice Broderick was equally unimportant. The dissent concluded that the environmental impact of Bacon’s use was minimal and that this de minimis impact was insufficient to violate the spirit of the ordinance.59

Regarding the concurrence’s treatment of the hardship standard, the dissent noted that the Simplex test was crafted with an eye towards Judge Horton’s dissent in Grey Rocks.60The test was designed to loosen the structures of a variance and afford the relief appropriate to avoid an unconstitutional application of an otherwise valid, general regulation.61 The dissent stated that the concurrences’ interpretation of the hardship standard would undermine those previous efforts to make the variance requirements more reasonable and balance the conflict between zoning ordinances and property rights.62

In contrast, the dissent read Simplex to state that the first prong of the hardship test is met “when special conditions of the land itself render the use for which the variance is sought reasonable and the ordinance interferes with that use.”63The dissent rejected giving weight to available alternatives, and found that zoning boards are not permitted to consider whether other alternatives exist in deciding whether the requested use itself is reasonable.64Specifically, the dissent noted that the shed Ms. Bacon had built was shielded from view by a deck, heavy shrubbery, and a neighboring fence—all sufficient to render the use reasonable and directly related to the special conditions of her land.65

With the stage thus set, the Court was ready for a case which would allow “clarification” of the New Hampshire standards for variances, and the right case was Boccia v. City of Portsmouth—another case where the abutters lost before the ZBA and the trial court.66

Boccia concerned a seven-acre undeveloped parcel of land located at the intersection of Kearsarge Way and Market Street Extension in Portsmouth, which was owned by the intervener Ramsey. Ramsey’s property had previously been rezoned from residential to “general business” to permit construction of a hotel. After the rezoning, Ramsey filed applications with the ZBA for six variances in connection with the development of a 100-room hotel. The variances concerned front, side, and rear setbacks along with setbacks from residentially zoned property and vegetative buffer requirements, which the ZBA granted with stipulations.65The abutters successfully appealed this decision, arguing that the ZBA had improperly viewed the rezoning order as the basis for granting the variances. The Rockingham County Superior Court (Abramson, J.) remanded the case back to the ZBA for reconsideration of the Simplex standards.68

On remand, Ramsey argued that he met the appropriate standards for the variances because of the size, configuration, and amount of wetlands traversing the property. The abutters argued that Ramsey could not demonstrate hardship and presented alternative plans for a 60-room hotel which would not need the variances. After considering the Simplex criteria for unnecessary hardship and the remaining four factors of the test for variances, the ZBA again granted the variances, and the abutters again appealed to Rockingham County Superior Court.69This time, Judge Tina Nadeau upheld the ZBA’s action, finding that it had properly applied the Simplex standard in the context of a 100-room hotel as a reasonable use of the property.70

In reversing and remanding this case back to the trial court yet again, the Supreme Court relied heavily on the special concurrence of Justices Duggan and Dalianis in Bacon v. Town of Enfield.71Without deviating from previous cases, the Supreme Court began by noting the five requirements for a variance are statutory in origin via RSA 674:33, I(b). Specifically, a petitioner for a variance must show: (1) the variance will not be contrary to the public interest; (2) special conditions exist such that literal enforcement of the ordinance results in unnecessary hardship; (3) the variance is consistent with the spirit of the ordinance; and (4) substantial justice is done.72In addition, a variance may not be granted if it will diminish the value of surrounding properties.73 The Court further noted that the statute’s language derived from the Standard State Zoning Enabling Act, which was drafted by the United States Department of Commerce in the 1920’s as model zoning-enabling legislation.74

Giving an historical perspective, the Court cited to Governor’s Island Club v. Town of Gilford and Grey Rocks for the previous standard for unnecessary hardship, which required “that the deprivation resulting from the enforcement of the ordinance had to be so great as to effectively prevent the landowner from making any reasonable use of the property.”75 The Court continued by commenting that in Simplex:

We established a new and less restrictive standard. Applicants for a variance may now prove unnecessary hardship by demonstrating that: (1) a zoning restriction as applied to their property interferes with their reasonable use of the property, considering the unique setting of the property in its environment; (2) no fair and substantial relationship exists between the general purposes of the zoning ordinance and the specific restriction on the property; and (3) the variance would not injure the public or private rights of others.76

The problem in the Court’s eyes, however, was that the then-unnecessary hardship test did not distinguish between “use” and “non-use” (or “area”) variances as noted in the Bacon special concurrence.77

The Court commented that a “use” variance would allow the applicant to undertake a use which the zoning ordinance prohibits, while:

A non-use variance [would authorize] deviations from restrictions which relate to a permitted use … that is, restrictions on the bulk of buildings, or relating to their height, size, and extent of lot coverage, or minimum habitable area therein, or on the placement of buildings and structures on the lot with respect to the required yards. Variances made necessary by the physical characteristics of the lot itself are non-use variances of a kind commonly termed “area variances.”78

Noting that Simplex was decided primarily in the context of a use variance, the Court determined that the Simplex test for unnecessary hardship was inappropriate to apply when seeking an area variance.79 Accordingly, the Court created two new factors for consideration in the area variance hardship calculation. Specifically, these factors are:

(1) whether an area variance is needed to enable the applicant’s proposed use of the property given the special conditions of the property; . . . and (2) whether the benefit sought by the applicant can be achieved by some other method reasonably feasible for the applicant to pursue, other than an area variance. . . . Th[e] second factor includes consideration of whether the variance is necessary to avoid an undue financial burden on the owner.80

The Court noted repeatedly that as with the Simplex test for use variances, “these factors for unnecessary hardship are to be applied in conjunction with the other four prongs of the existing five-part test for variances.”81

In considering the first factor of whether the variances were necessary to enable the applicant’s proposed use, the Court noted that a landowner need not show that without the variance, the land would be valueless.82In considering the record, the Court determined that the record supported a finding that special conditions of the property existed and that the variances were needed to enable the 100-room hotel as designed.83Regarding the second factor, the Court noted that the issue was “whether there is a reasonably feasible method or methods of effectuating the proposed use without the need for variances” and “whether an area variance is required to avoid an undue financial burden on the landowner.”84While adverse effect must be more than a mere inconvenience, a landowner need not show that without the variance the land would be rendered valueless or incapable of producing a reasonable return.85Accordingly, boards and courts must examine the financial burden on the landowner of denial of the variance, including the relative expense of available alternatives.86

Furthermore, the Court provided a “flow chart” of the five prongs of the variance test with a breakout under the “unnecessary hardship” prong between “use” variances (which use the three-part Simplex analysis) and “area” variances (which use the two-part Boccia analysis).87In this case, the Court found that it was unclear on the record whether there were reasonably feasible alternative methods to implement the proposed use without undue financial burden to the landowner that would obviate the need for the variances.88Finding that the remaining four prongs had been met, the Court remanded the case to the Superior Court to determine whether the developer had made an appropriate showing of hardship under these new factors.89

Shortly thereafter, the Supreme Court rendered its decision in Shopland v. Town of Enfield.90At issue was the Shoplands’ 378-square-foot seasonal cottage on the shores of Crystal Lake, which they wished to expand by building a two-bedroom, one-bath addition comprising 338 square feet. The town’s zoning ordinance prohibited any structure within 50 feet of the seasonal high water mark of the lake, and, like most properties around the lake, almost all of the Shoplands’ existing home was within that setback, making it a pre-existing, non-conforming use. Accordingly, to expand the footprint, the Shoplands sought the variance. At the hearing, and subsequently, Mr. Shopland responded to the ZBA’s request that he make his expansion by adding another story with a statement of these facts: his current home was on pilings and not a sturdy foundation, so any construction would require further excavation for such foundation and thereby create an even greater disturbance within the setback. The ZBA denied the variance, finding that it was contrary to the public interest since violating the setback would endanger the health of the lake and establish a bad precedent; that there was no unnecessary hardship; and that substantial justice by providing a variance to the Shoplands was outweighed by the potential loss suffered by the greater public if harm was done to the lake.91

On appeal, the Grafton County Superior Court (Smith, J.) agreed that the Shoplands had met the Simplex standard for unnecessary hardship and vacated the ZBA’s decision.92 The Supreme Court reversed and remanded the matter back to the trial court holding that “[i]n light of our decision in Boccia, the Shoplands’ variance application must be reviewed under the two factors for establishing unnecessary hardship in an area variance application.”93 The Court further commented that the trial court should consider whether the case needed to be remanded to the ZBA to allow further evidence and proceedings so that the parties could address the Boccia standard.94

Justice Galway did not participate in this decision written by Justice Duggan and joined by Chief Justice Broderick and Justice Dalianis. Justice Nadeau, joined by retired Chief Justice Brock, wrote a lengthy dissent as his “first opportunity to discuss the substance and significance of Boccia . . . because I believe Boccia was wrongly decided.”95Justice Nadeau believed the Court erred in creating a “needless test” and constructing “this arbitrary distinction” between variances, unintended by both Simplex and RSA Chapter 674.96Justice Nadeau did not believe that Boccia and Simplex could co-exist harmoniously, but that Simplex alone must govern all requests for variances.97Accordingly, he would view the Simplex standard as having been met in this case and would have affirmed the Superior Court.

IV. So What Does It All Mean?Applying Simplex and Boccia

The Supreme Court’s decisions after Boccia continue to clarify (and possibly confuse) the overall analytical scheme of considering variance applications. In the following cases, the three most discussed parts of the hardship element of the variance analysis are: (1) reasonable use, (2) distinctions between use and area variances, and (3) uniqueness of the property. Through these topics, the Court continues to refine the variance analysis and provide guidance to towns, applicants, municipal practitioners, and ZBAs.

A. Defining “Reasonable Use”

In the case of Vigeant v. Town of Hudson, Vigeant applied for an area variance to build a five-family dwelling.98The building was a permitted use in the zoning district, but the parcel of land was peculiarly shaped—long and narrow at the intersection of two roads with significant areas of wetlands. The shape and composition of the lot provided Vigeant with building complications if the dwelling was to comply with the setback requirements. The ZBA denied the variance request because it found the request violated the spirit of the ordinance, the hardship element had not been proven, surrounding property values would decrease, and the variance was not in the public interest.99

On appeal, the trial court reversed the ZBA’s decision and found the denial was “unlawful and unreasonable”100 The court stated that an owner cannot be denied a variance based on a permitted use, and that an owner only needs to show the variance is reasonable considering the unique setting of the property.101 Noting that the dimensions of the property would likely necessitate a variance request for any reasonable use, the court found the setback requirement interfered with the Vigeant’s reasonable use of the property.102

The Supreme Court agreed, in part, with the town’s argument that the reasonableness of the proposed use must be taken into account, and held that “it is implicit under the first factor of the Boccia test that the proposed use must be reasonable.”103However, the Court limited that holding to “when an area variance is sought, the proposed project is presumed reasonable if it is permitted under the Town’s applicable zoning ordinance…. If the use is allowed, an area variance may not be denied because the ZBA disagrees with the proposed use of the property.104

Furthermore, under the second Boccia hardship factor, the Court noted there must be no reasonable way for an applicant to achieve that proposed use without a variance, and, in making this determination, “the financial burden on the landowner considering the relative expense of available alternatives must be considered.”105 In the case of Vigeant’s application, the ZBA had considered that the applicant could have made an alternate use with fewer dwelling units; but the Supreme Court rejected that argument out of hand: “In the context of an area variance, however, the question whether the property can be used differently from what the applicant has proposed is not material.”106 In light of the configuration and location of the lot in question, the Court determined that it was “impossible to comply with the setback requirements” such that an area variance was necessary to implement the proposed plan from a “’practical standpoint.’”107 In so finding, the Supreme Court upheld the trial court’s determination that the ZBA’s denial of the variance was unlawful and unreasonable.108

B. Distinguishing an Area Variance from a Use Variance

The Court offered additional guidance in the differentiation between use variances and area variances in the case of Harrington v. Town of Warner.109Abutters of a manufactured housing park appealed a variance granted by the ZBA and upheld by the trial court. The ZBA granted a variance that allowed the landowner to expand his park to add 25 additional sites to the already-existing 33 sites. The addition would take place on a previously undeveloped portion of the lot without adequate road frontage to be subdivided. The applicable ordinance permitted manufactured homes in the property’s zone but limited it to a total of 25 sites. The ZBA did a site walk and conditioned the expansion to not allow more than five sites per year for five years.

When this case reached the Supreme Court, the Court turned its attention to an analysis of the difference between a use and an area variance:

The critical distinction between area and use variances is whether the purpose of the particular zoning restriction is to preserve the character of the surrounding area and is thus a use restriction….If the purpose of the restriction is to place incidental physical limitations on an otherwise permitted use, it is an area restriction…. Whether the variance sought is an area or use variance requires a case-by-case determination based upon the language and purpose of the particular zoning restriction at issue.110

The Court then analyzed the applicable provisions of the Warner zoning ordinance and found that it was a limitation on the intensity of the use in order to preserve the character of the area such that the provision was a use restriction requiring a use variance under the Simplex criteria.111

While not actually analyzing each prong of the “three-prong standard set forth in Simplex” for unnecessary hardship, the Court noted that Simplex first required “a determination of whether the zoning restriction as applied interferes with a landowner’s reasonable use of the property,” and that “reasonable return is not maximum return.”112Additionally, the Court held that, while the constitutional right to enjoy property must be considered, the “mere conclusory and lay opinion of the lack of…reasonable return is not sufficient; there must be actual proof, often in the form of dollars and cents evidence” of such interference with reasonable use.113

The Court in Harrington continued with a “second” determination—whether the hardship was a result of the unique setting of the property. The Court stated that this required that “the property be burdened by the zoning restriction in a manner that is distinct from other similarly situated property.”114While the property need not be the only one so burdened, “the burden cannot arise as a result of the zoning ordinance’s equal burden on all property in the district.”115Furthermore, that burden must arise from the property and not from the individual plight of the landowner.116 Lastly, the Court considered the “final” condition—the surrounding environment—”whether the landowner’s proposed use would alter the essential character of the neighborhood.”117

The Court also considered the issue of “self-created hardship” and relied on its prior decision in Hill v. Town of Chester118 to find that self-created hardship does not preclude the landowner from obtaining a variance since “purchase with knowledge” of a restriction is but one “non-dispositive factor” to be considered under the first prong of the Simplex hardship test.119 The Court gave the abutters’ other arguments short shrift. The Court found that the applicant showed that the variance was not contrary to the spirit of the ordinance and did not detract from the intent or purpose of the ordinance because:(1) mobile home parks were a permitted use in the district; (2) the mobile home park already existed in the area; (3) the variance would not change the use of the area; and (4) were he able to subdivide his land, the applicant would have sufficient minimum acreage for the proposed expansion.120

C. What It Means To Be “Unique”

More recently, the Court discussed the issue of “uniqueness,” which has continued to be the basis for many appeals of variance requests. In these cases, the Court emphasized that all successful variance applications must contain a showing as to why the property differs from those around it. What emerges is an analysis as to what sort of a foundation an applicant can present to demonstrate “uniqueness.”

In the case of Garrison v. Town of Henniker, the Supreme Court upheld the reversal of variances granted for an explosives plant, which was to be located in the middle of 18 lots totaling 1,617 acres and zoned “rural residential.”121 The applicant had sought use variances to allow the commercial use in the residential zone and to allow the storage and blending of explosive materials where injurious or obnoxious uses are prohibited. After an extensive presentation of the nature of the applicant’s business and the site, the ZBA voted 3-2 to grant the variances with two conditions:(1) the 18 lots had to be merged into one; and (2) the variances would terminate if the applicant discontinued the use.122

Upon appeal by abutters, the trial court reversed the ZBA’s decisions on finding that the evidence before the ZBA failed to demonstrate unnecessary hardship.123 In upholding that decision, the Supreme Court agreed that, while the property was ideal for the applicant’s desired use, “the burden must arise from the property and not from the individual plight of the landowner.”124 In discussing the three-prong Simplex standard for unnecessary hardship, the Supreme Court focused on the first prong: that a zoning restriction “interferes with their ‘reasonable use’ of the property, considering the unique setting of the property in its environment.”125 In doing so, the Court agreed that the evidence failed to show that the property at issue was sufficiently different from any other property within the zone to be considered “unique for zoning purposes.”126

As a minor “bone” to the applicant, the Supreme Court did agree that Harrington’s requirement of “dollars and cents” evidence of lack of reasonable return may be met through either lay or expert testimony, but the evidence, as presented, was not enough to convince the Court that the hardship resulted from the unique setting of the property.127 Thus, the Court charged applicants to present sufficient evidence for the ZBA to determine that the use is reasonable and that the property is unique, i.e., distinguishable from surrounding properties in a manner that could justify use relief.

In Community Resources for Justice, Inc. v. City of Manchester, the Court further clarified the ruling in Rancourt by indicating that the hardship test required a showing that the property in question is somehow different than other property in the subject zoning district.128 Here, the applicant was an organization that operated “halfway houses” under contract with the Federal Bureau of Prisons. The applicant proposed to operate a halfway house in the City’s Central Business District. The City indicated that a use variance was required, stating that the proposed use was a “correctional facility” and that such use was not allowed in any district within the City. While the ZBA denied the variance, the trial court found that evidence had been presented to satisfy the hardship criterion.129The Supreme Court, however, supported the City and found that there was no evidence of special conditions of the property in question which distinguished it from the area in general.130In particular, the Court stated that the cited evidence of availability of public transportation and city services was true of other lots in the area so that the subject property was not unique.131

The applicant also claimed that even if the hardship criterion was not met, the trial court’s approval of the variance should stand based on two arguments: (1) the City’s adoption of the ordinance exceeded its authority under RSA 674:16 because it does not support the general welfare; and (2) the ordinance as applied is an unconstitutional ban of correctional facilities by the city.132Included within the constitutional claim was the argument that the ban violated state and federal rights to equal protection. The Court noted that under New Hampshire law the right to use and enjoy property was an important substantive right, and that equal protection claims presented on this issue must be subject to an “intermediate scrutiny test.”133 The Court indicated that this test would require a showing by the government that the challenged legislation was substantially related to an important governmental objective, and such a showing may not consist merely of justification created after litigation is filed and/or overbroad generalizations.134The Court remanded the case back to the trial court for further proceedings on the constitutional claims.135

The Court’s handling of the constitutional challenge underscores the need for municipalities to carefully craft zoning ordinance to anticipate potential constitutional challenges and to ensure that there is a clear link between the ordinance and important governmental objectives.

In a recent case, Malachy Glen Associates, Inc. v. Town of Chichester, the Supreme Court affirmed the trial court’s reversal of the Town’s ZBA and order that the area variance in question be granted.136Malachy Glen had obtained site plan approval in 2000 for a self-storage facility on Dover Road (Route 4), which showed structures and paved surfaces within 100 feet of a wetland. At the time of approval, the town did not have a wetlands ordinance, but prior to construction, the town implemented such an ordinance creating a 100-foot buffer around all wetlands. Malachy Glen applied for a variance from this ordinance and was initially denied. This decision was reversed and remanded by the trial court for failure to consider the proper standard.137

On remand, the ZBA sua sponte bifurcated the application into separate requests, granted the variance for the needed driveway within the buffer zone, and denied the variance to build the storage units within the buffer zone.138 The trial court found that the denial was unlawful and unreasonable, in part, because the ZBA “failed to consider the evidence placed before it.”139

In examining the ZBA’s treatment of the Boccia hardship standard for an area variance, the Court stated that “special conditions” required that the applicant demonstrate that its property is unique in its surroundings.140Additionally, the Court cited Vigeant for the proposition that the proposed project is presumed reasonable if it is a permitted use and that an area variance may not be denied because the ZBA disagrees with the proposed use of the property.141Furthermore, the Court cited a national treatise for the proposition that satisfaction of unnecessary hardship peculiar to the property “is most clearly established where the hardship relates to the physical characteristics of the land.”142

The Court also rejected the ZBA’s argument that there were other reasonably feasible methods available to the applicant via the elimination of a number of the desired storage units. The Court stated that “the ZBA must look at the project as proposed by the applicant, and may not weigh the utility of alternate uses in its consideration of the variance application.”143 While noting that if the proposed project could be built without the need for the area variance, then it is the applicant’s burden to show that such alternative is cost prohibitive, the Court stated that “the ZBA may consider the feasibility of a scaled down version of the proposed use, but must be sure to also consider whether the scaled down version would impose a financial burden on the landowner.”144 In this case, the Court recognized that reducing the project by 50 percent would result in financial hardship to the applicant and that no reasonable trier of fact could have found otherwise.145

V. The Other Elements of the Variance Statute

While the Court has focused mostly on the hardship element of the variance requirements, the other four have not been entirely forgotten. An applicant must still meet all five criteria to be granted a variance—whether for use or area. After the majority of one in Bacon v. Town of Enfield discussed the “spirit of the ordinance” element, the Court discussed primarily the hardship element until Harrington v. Town of Warner.146

In Harrington, the Court briefly discussed the requirement of substantial justice within the variance analysis. In permitting the increase of manufactured housing, the Court found that “substantial justice would be done” because “it would improve a dilapidated area of town and provide affordable housing in the area.”147 This comment on “substantial justice” was one of the few found in the case law of variances. A previous statement suggested that the analysis should be whether the loss the applicant will suffer by its inability to reasonably use its land as it desired without the variance outweighed any gain to the public by denying the variance.148 The Court’s comments on substantial justice appear to be secondary to the hardship elements, but newer cases reveal that it is just as important.

The issue of substantial justice appeared again in Malachy Glen Associates, Inc. v. Town of Chichester.149 Within this case, the Court noted that the ZBA should look at “whether the proposed development was consistent with the area’s present use.”150 The Court expressly held that the ZBA’s stated reason of “no evidence” that a scaled-down version of the project would be economically unviable “is not the proper analysis under the ‘substantial justice’ factor.”151 Since the ZBA applied the wrong standard, the trial court is authorized to grant the variance if it found as a matter of law that the requirement was met.152 In this case, the trial court had found via uncontroverted evidence that the project was appropriate for the area, did not harm the abutters or nearby wetlands, and that the general public would realize no appreciable gain from denying this variance.153

Another element the Court has clarified is whether the variance is contrary to the public interest. In Chester Rod & Gun Club v. Town of Chester, the Court explored the public interest component of New Hampshire variance law.154 In this case, the Supreme Court held that the zoning ordinance is the relevant declaration of public interest to be examined, rather than any specific vote at Town Meeting.155 In that case, the ZBA had been faced with two variance applications for competing cell towers—one on the club’s property and one on the town’s. At the March meeting, the town passed a general warrant article stating that all cell towers should be on town-owned land, and the ZBA relied on that article to grant the town’s application and deny the club’s. On appeal, the trial court reversed the ZBA and ordered that the club’s variance be granted.156

In reversing the trial court, the Supreme Court stated what we as practitioners in the field have long espoused: that the criteria of whether the variance is “contrary to the public interest” or would “injure the public rights of others” should be construed together with whether the variance “is consistent with the spirit of the ordinance.”157More importantly, the Supreme Court then held that to be contrary to the public interest or injurious of public rights, the variance “must unduly, and in a marked degree” conflict with the basic zoning objectives of the ordinance.158 In making such a determination, the ZBA should examine whether the variance would (a) alter the essential character of the locality or (b) threaten public health, safety or welfare.159 The Supreme Court, however, took the unusual step of reprimanding the lower court for improperly ordering the issuance of the variance.160 The trial court was instructed to remand the matter back to the ZBA for factual findings on all five prongs of the variance criteria.161

The Court in Malachy again confirmed that all five criteria should be analyzed by discussing the public interest element. The Court cited to Chester for the premise that the requirement that the variance not be contrary to the public interest is “related to” the requirement of consistent with the spirit of the ordinance:“[T]o be contrary to the public interest…the variance must unduly, and in a marked degree conflict with the ordinance such that it violates the ordinance’s basic zoning objectives.”162 In making that determination, the Court restated that the ZBA was to ascertain whether the variance would “alter the essential character of the locality” or “threaten the public health, safety or welfare.”163 The Court rejected the ZBA’s finding that the variance would be contrary to the public interest and to the spirit of the ordinance because it would encroach on the wetlands buffer.164The uncontroverted evidence was that this project was in an area consisting of a fire station, a gas station and a telephone company; that the variance for encroachment for the driveway had been granted; and that applicant’s wetlands consultant had testified that the project would not injure the wetlands in light of the closed drainage system, detention pond and open drainage system designed for the project to protect the wetlands.The Court also rejected the ZBA’s argument that it was not bound by the conclusions of the experts in light of their own knowledge of the area, in part, because the ZBA members’ statements were conclusory in nature and not incorporated into the “Statement of Reasons” for their denial: “The mere fact that the project encroaches on the buffer, which is the reason for the variance request, cannot be used by the ZBA to deny the variance.”165

Conclusion—the Answer is “Yes”, “No”, and “Maybe”

The Court has thus left ZBAs, courts, and land use practitioners with a set of variables to apply in variance situations, whose outcome may well be difficult to predict. In the case of a “use” variance, the applicant will be faced with applying the three-part Simplex standard for unnecessary hardship while recognizing that boards and courts will no longer consider it under a pure “reasonable use” standard.The chances for a use variance could be considered to increase with the number of prior similar uses in the immediate area or applicable zone; but the odds for the “first time” applicant could be considered slim in light of the statements in the Bacon concurrence and the Boccia decision.

The variables to be applied in an area variance, however, could be viewed as more favorable to an applicant although somewhat more difficult to apply. An applicant should always be able to meet the first of the Boccia unnecessary hardship prongs, i.e., to show whether an area variance is needed to enable the proposed use of the property given the special conditions of the property. The “wildcard” will be the second prong of whether the benefit sought by the applicant can be achieved by some other method reasonably feasible for the applicant to pursue, other than an area variance, giving due consideration to whether the variance is necessary to avoid an undue financial burden on the applicant.

In either case, it is important to remember that regardless of which standard is applied for determination of whether unnecessary hardship exists, that hardship is but one of five elements necessary for an applicant to prove in order to obtain the variance. One can safely assume that the Court will be mindful of the interplay among all five variance criteria, and that further case law will continue to address both hardship and the remaining four elements. As these recent cases indicate, the New Hampshire Supreme Court is not a passive court, but one that is actively engaged in an intellectual debate of matters before them. While one may not always agree with the outcome, the recent decisions certainly have captivated the attention of those working in this volatile field.

6. RSA 674:33, I(b).In addition to focusing on the remaining four variance elements, recent case law has begun to examine related procedural issues such as the making of findings and the appropriateness of remand proceedings.See Malachy Glen Associates, Inc. v. Town of Chichester, 920 A.2d 1192 (2007) (discussing the importance of findings); Kalil v. Town of Dummer ZBA, (Docket 2006-381) (discussing the possibility of the trial court to remand the case to the ZBA).

148. See U-Haul Co. of N.H. & Vt., Inc. v. Concord, 122 N.H. 910, 912-13 (1982) (finding that substantial justice would be done by granting a variance to permit construction of an apartment in the general business district since it would have less impact on the area than a permissible multi-family unit); see also, Loughlin, §24.11, page 308, citing the New Hampshire Office of State Planning Handbook as follows:

It is not possible to set up rules that can measure or determine justice.Each case must be individually determined by board members.Perhaps the only guiding rule is that any loss to the individual that is not outweighed by a gain to the general public is an injustice.The injustice must be capable of relief by the granting of a variance that meets the other qualifications.

149. 920 A.2d at 1199.

150. Id.

151. Id.

152. Id.

153. Id.

154. 152 N.H. 577, 580 (2005).

155.Id. at 581.

156. Id. at 578.

157. Id. at 580.

158. Id. at 581.

159. Id.

160. Id. at 583.

161. Id.

162. Malachy Glen Associates, 920 A.2d at 1196.

163. Id. at 1196–97.

164. Id. at 1197.

165. Id. at 1197–98.

The authors wish to thank Susan Lowry for her invaluable assistance with this article.Susan spent many hours reviewing and revising the draft article, as well as compiling all footnotes.Susan is a third year law student at VermontLawSchool and worked at our firm as a summer clerk during the summer of 2007.

Author

Attorney Christopher L. Boldt, of Donahue, Tucker & Ciandella, primarily focuses on municipal law and land-use issues. He recently served on a New Hampshire Bar Association Real Property Section subcommittee that completed a revision of the Title Examination Standards.

Author

Attorney Sharon Cuddy Somers has concentrated in muncipal law, including land use law, since 1988, when she began practice as an AssistantCity Attorney for the City of Portsmouth. Attorney Somers now practices with Donahue, Tucker and Ciandella, PLLC and regularly represents municipal clients and developers on a variety of land use matters and related issues.